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Skeena Resources Limited (TSE:SKE) is possibly approaching a major achievement in its business, so we would like to shine some light on the company. Skeena Resources Limited explores and develops mineral properties in Canada. With the latest financial year loss of CA$118m and a trailing-twelve-month loss of CA$107m, the CA$662m market-cap company alleviated its loss by moving closer towards its target of breakeven. As path to profitability is the topic on Skeena Resources' investors mind, we've decided to gauge market sentiment. We've put together a brief outline of industry analyst expectations for the company, its year of breakeven and its implied growth rate.
See our latest analysis for Skeena Resources
Skeena Resources is bordering on breakeven, according to the 3 Canadian Metals and Mining analysts. They anticipate the company to incur a final loss in 2023, before generating positive profits of CA$373m in 2024. The company is therefore projected to breakeven around 2 years from now. What rate will the company have to grow year-on-year in order to breakeven on this date? Using a line of best fit, we calculated an average annual growth rate of 125%, which is rather optimistic! Should the business grow at a slower rate, it will become profitable at a later date than expected.
We're not going to go through company-specific developments for Skeena Resources given that this is a high-level summary, though, bear in mind that generally a metal and mining business has lumpy cash flows which are contingent on the natural resource mined and stage at which the company is operating. This means, large upcoming growth rates are not abnormal as the company is beginning to reap the benefits of earlier investments.
One thing we’d like to point out is that Skeena Resources has no debt on its balance sheet, which is quite unusual for a cash-burning metals and mining company, which usually has a high level of debt relative to its equity. The company currently operates purely off its shareholder funding and has no debt obligation, reducing concerns around repayments and making it a less risky investment.
Next Steps:
There are key fundamentals of Skeena Resources which are not covered in this article, but we must stress again that this is merely a basic overview. For a more comprehensive look at Skeena Resources, take a look at Skeena Resources' company page on Simply Wall St. We've also compiled a list of important factors you should look at:
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Valuation: What is Skeena Resources worth today? Has the future growth potential already been factored into the price? The intrinsic value infographic in our free research report helps visualize whether Skeena Resources is currently mispriced by the market.
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Management Team: An experienced management team on the helm increases our confidence in the business – take a look at who sits on Skeena Resources’s board and the CEO’s background.
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Other High-Performing Stocks: Are there other stocks that provide better prospects with proven track records? Explore our free list of these great stocks here.
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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.